Allentown contemplates extending tax breaks

They will expire next year for designated properties without approval from City Council.

June 03, 2009|By Jarrett Renshaw OF THE MORNING CALL

Tonight Allentown City Council considers extending offers of tax breaks for commercial and residential tracts whose promise remains unfulfilled, including the Schoen's building, the Neuweiler Brewery and portions of the Lehigh River waterfront.

The properties, totaling more than 47 acres, are designated Keystone Opportunity Zone sites, but the state and local tax breaks that come along with the designation will expire at the end of 2010 without approval.

The Allentown School District already approved the extensions; Lehigh County has yet to act.

Under the proposal, the properties would be eligible for an additional 10 years of tax breaks, but only after they are developed, and only if they are developed by the end of 2015.

The list includes properties city officials have tried to spark economic development on for years without success.

The request from the Pawlowski administration comes as the city is facing declining revenues and a budget deficit. The city's fiscal situation did not prevent council from expanding the KOZ program earlier this year, saying the long-term economic benefits outweighed short-term losses.

City officials have pointed to the Allentown Brew Works bar and restaurant, PPL Plaza and the Butz Building as projects lured by the incentive that will begin paying significant taxes in 2011.

The list includes mostly properties slated for residential development, a point of criticism for several council members.

"I would much rather see these incentives going to commercial projects," said Councilman Michael Donovan, who has considered requesting that the commercial and residential projects be voted upon separately.

Mayor Ed Pawlowski defended the inclusion of residential properties, pointing to Philadelphia's successful efforts at luring residents back to the city with tax abatements, similar to KOZ benefits.

"More residents downtown mean more customers for those businesses. More residents will provide more of a thriving inner city. That's good for Allentown and good for the Lehigh Valley," Pawlowski said in a written statement.

Two of the biggest potential benefactors of the proposed plan are also two of Pawlowski's biggest financial supporters.

Philadelphia-based Pennrose Properties is the developer of Overlook Park, while Nic Zawarski & Sons owns the Schoen's Building and Townes at Trexler Square. The heads of the these two firms have contributed more than $40,000 combined to Pawlowski since 2005.

AN EXTENDED BREAK?

Allentown City Council will consider extending tax breaks for these and other properties in hopes of luring developers. The board meets at 7:30 tonight in City Hall.

Schoen's Building, 612 Hamilton St.

The top two floors of the Allentown Brew Works building, 812 Hamilton St.

More than 60 residential properties in the Overlook Park development on city's East Side.

Neuweiler Brewery building, 401 N. Front St.

Three Lehigh Landing parcels, including the Calo building, which is to be demolished.